An unidentified crypto trader made over $100,000 in profit after buying a token just minutes before it was listed on dominant crypto exchange Binance, according to analysis by on-chain sleuth Lookonchain.
The trader purchased $208,335 worth of Gains Network (GNS) tokens just 30 minutes before Binance listed the token on its global exchange. GNS soared some 51% just after the listing—from $7.92 to $12.01. The trader then offloaded their GNS position, scooping up $106,747 in profits in less than an hour.
Lookonchain referred to the exceptionally timed trade, perhaps cheekily, as “smart money.” If recent trends indicate anything, though, smarts may have nothing to do with it.
In the past year, multiple leading crypto exchanges have come under scrutiny for alleged—and in some cases, confirmed—instances of front-running: the practice of traders, armed with insider information, shoring up large positions of tokens that are all-but-certain to be boosted in value, and in this case, by a coveted listing on a centralized crypto exchange.
Earlier this month, Ishan Wahi, a former Coinbase product manager, pleaded guilty to participating in an insider trading scheme that reaped him $1.1 million in profits. The case was described by federal prosecutors as the first insider trading case involving cryptocurrencies.
When charges were first announced against Wahi in July, Binance CEO Changpeng Zhao condemned the Coinbase employee's actions.
“Crypto or not, regulated or not, insider trading and front running should be criminal offenses in any country,” Zhao said.
